Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed its stability rating for the Alfalah Islamic Rozana Amdani Fund, maintaining a long-term rating of AA(f) with a stable outlook. This decision reflects the fund’s continued low-risk profile and its ability to meet investor liquidity needs through daily dividends.

According to The Pakistan Credit Rating Agency Limited, the Alfalah Islamic Rozana Amdani Fund has been designed to offer competitive returns while prioritizing the liquidity needs of its investors by investing in low-risk and highly liquid Shariah-compliant money market instruments. The stability of the fund’s rating is supported by its prudent investment policy and diversified asset portfolio.

The fund’s asset diversification as of the end of June 2024 included approximately 55.7% in AA-rated avenues, 33.1% in AAA-rated avenues, and 11.3% in other rated areas. Investments were strategically placed with about 39.5% in development financial institutions (DFIs), 30.7% in bank placements, 15.2% in Term Finance Certificates (TFCs)/Short-term Sukuk, 11.1% in government-backed securities, and 3.4% in other assets.

The fund’s duration and Weighted Average Maturity (WAM) both stood at 37 days as of the end of June 2024, indicating a conservative approach towards managing interest rate and credit risk. Despite a high level of redemption pressure indicated by a unit holding pattern where approximately 62.53% of the units are held, the fund effectively manages redemption risks by maintaining sufficient liquidity levels.

PACRA notes that any significant changes to the fund’s investment policy or deviations from the compliance standards could impact future ratings.